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As part of my ongoing Online Strategy Roundtables , this morning I worked with three new entrepreneurs, each at a different stage of validating who their customers are and building their businesses accordingly. Two have e-commerce businesses, which I love. In fact, my Forbes column tomorrow will discuss the shift from brick and mortar shops to e-commerce and how such businesses are so well poised for Web 3.0. Main Street America is changing as small business owners move online and get rid of the expensive real estate costs. Sponsor Sramana Mitra is a technology entrepreneur and strategy consultant in Silicon Valley. She has founded three companies and writes a business blog, Sramana Mitra on Strategy . She has a masters degree in electrical engineering and computer science from the Massachusetts Institute of Technology. Her three books, Entrepreneur Journeys , Bootstrapping, Weapon Of Mass Reconstruction , and Positioning: How To Test, Validate, and Bring Your Idea To Market are all available from Amazon. Her new book Vision India 2020 was recently released. Mitra is also a columnist for Forbes and runs the 1M/1M initiative. Up first was Ellen Sinreich and her company Green Edge Workshops . Ellen is a consultant with expertise in sustainability and real estate. Based on her practice, she has designed some workshops that enable employees to develop strategies that will drive down a company's carbon footprint. She is looking to reach mid market companies in her geographic region (New York), but to date has no customers. Clearly this is a business that has yet to be validated. I believe Ellen is trying to reach too broad a market based on her experience. I recommended she narrows her value proposition to align better with her expertise by targeting companies that deal with facilities and building issues. She asked for advice on finding clients and unfortunately there is no obvious way to find clients when you are a consultant. What worked for me early on was using my personal network for referrals and I suggest she does the same to connect with her target market. Later on, while discussing the Entrepreneur Journeys methodology, I also suggested that folks should read the Finisar case study in Entrepreneur Journeys Volume One to get a good feel for what it takes to get a business off the ground through consulting, and then build a product company through that process by getting close to customers, while generating cashflow all along. Finisar, for those of you who don't know, went public in 2001 at a $5 billion market cap, and was largely a bootstrapped case study. Danny Wong presented Blank-Label , an e-commerce site that allows men to co-create and custom design dress shirts at affordable prices. This site was launched five months ago and has seen a steady increase in sales but has not yet hit its stride. While Danny is well-versed in SEO traffic optimization, he needs to narrow his market to target the exact psychographic interested in being this involved in buying shirts- in other words, style conscious men. I recommend he target his PPC campaigns to the more fashionable zip codes across the country and to go slowly. I believe focusing all their efforts on the correct psychographic will make all the difference. This is a business for a small niche market, but definitely worth building. Catherine Wood Hill gave a heart-felt presentation of La Grande Dame , an e-boutique for plus-sized women that she started with her mom. Having launched a year ago, and with thousands of customers already, this business has been well validated. Their target is women between the ages of 30 and 55 who are looking for high-end designer clothes in sizes 14 and up. I like it when a business is so tightly focused. This allows you to do so many things inexpensively through the Web. We discussed ways to fine tune customer acquisition so the business can scale faster. She said their PPC advertising has never yielded a good return on investment, so I suggested that she targets the most affluent zip codes in the country. I also suggest she continues to do more PR and all the SEO marketing, blogging, Tweeting, etc., that she is already doing to reach more customers. I believe this has the potential to become a very large business. I did research on this segment myself when I ran Uuma, my personalized fashion company for busy, professional women which Ralph Lauren was interested in acquiring in 1999. The roundtables are the cornerstone programming of a global initiative that I have started called One Million by One Million ( 1M/1M ). Its mission is to help a million entrepreneurs globally to reach $1 million in revenue and beyond, build $1 trillion in sustainable global GDP, and create 10 million jobs. In 1M/1M, I teach the EJ Methodology which is based on my Entrepreneur Journeys research, and emphasize bootstrapping, idea validation, and crisp positioning as some of the core principles of building strong fundamentals in early stage ventures. You can find the recording of this roundtable session here . Recordings of previous roundtables are all available here . You can register for the next roundtable here . Photo by Svilen Milev . Discuss
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Startup Strategy Roundtable: Web 3.0 and E-commerce
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Everywhere you look these days, people are attempting to start innovative businesses and nonprofits, working on putting team, product and financing together, and generally trying to change the world - or, at least, their world - through entrepreneurship. Meanwhile, I strongly suspect that the mortality rate of tech startups is as high as ever (no rigorous scientific tracking there, just common sense and observation - please do share stats if you know of some). In any case, one failed startup is one too many. Sponsor Guest author Greg Boutin helps startups and early-stage ventures defy a certain death, through strategy and marketing services . He blogs on entrepreneurship and on semantic technologies . He thanks Arnold Wytenburg , William Mougayar of Eqentia , Fabien Tiburce of Compliantia , and Ceara Scullion for their priceless input on this post. So, wouldn't it be great if we could align on a guiding set of principles on how not to kill a startup? Think Hippocratic Oath for entrepreneurs - just not strictly an oath, and more in the spirit of "Doing Good" than "Doing No Harm" (or "Doing No Evil" for that matter). After all, unlike humans, doing nothing to a startup is a sure path to death, so we need to be more proactive. And yes, I know, blanket business principles can sometimes be silly (if you haven't yet, I recommend you read the Halo Effect by Rosenzweig), but as the recent book The Checklist Manifesto argues, situations can also sometimes be improved with the introduction of simple, field-tested guidelines. I can personally tie every startup failure that I know of to the principles below not being respected. So here is a rough copy - or should I say an alpha - of a list, based on inputs from other entrepreneurs, and my own experience as a startup consultant and entrepreneur. Please make your own suggestions for changes and additions/subtractions in the comment section. If I get many responses, I'll compile the best submissions into a beta version to be published in a follow-up post. And of course, our list will always remain in beta. Without further ado: How Not to Kill Your Start-Up (v 0.1) This one's obvious - watch your cash flow. Whether your plan is to fund your startup through investors or through revenues, plan ahead. Every other principle below flows from this simple one. Spot a real problem and concentrate your efforts on solving it. Do not disperse your time among too many concurrent, unrelated pursuits. Identify your target market(s) and collect market feedback early on. Seek to understand your prospects and customers through first-hand observation (how do they currently deal with the problem you are trying to solve?) and continuous inputs. Design and develop a minimum viable solution as fast as possible. A minimum viable solution is anything you can extract a firm commitment from a potential client or investor with. Surround yourself with dedicated, effective people. Build a small team and a pipeline of strong players, and nurture a circle of supporters with knowledge and/or financial resources. Incentivize everyone intelligently (if nothing else, respect can go a long way) and reward them fairly. Read Crossing the Chasm . Appreciate the difference between early adopters and mainstream prospects. Know which one you target, and do not confuse technologies and products with whole solutions. Only offer whole solutions to mainstream leads. Consider other sources of competitive power than just technological sophistication, e.g. superior customer experience or service, exclusive distribution partnerships, or other market-based advantages. Have a plan for cutting through market noise. Know how prospects will hear about your solution. Understand that building a great product is required but rarely sufficient to build a great business, it needs to be marketed one way or another. Invest time in selecting and testing a business model, and be open to changing it based on new learning. Choose one you are able to sell to investors if you go down that road (even if it is based on traffic only,
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Here at ReadWriteStart, we've been following the Open Angel Forum closely as Jason Calacanis' project moves from city to city bringing angel investors and worthy startups together in one room. The first event in Los Angeles was of particular success to Backupify , which provides backup for your online social network data, including Facebook, Twitter, Delicious, WordPress, Gmail, Basecamp and many other services. Following the event, the company raised a Series A round of $900,000 from Calacanis, Chris Sacca, First Round Capital and a few others. Sponsor Earlier this week, CEO Rob May posted his take on the process of raising funding from VCs, which he likens to dating. According to May, pitching to VCs is not about forcing your idea down their throat and convincing them why they should invest in it; if a startup and a VC are meant to be, it will be more like love at first sight. "They either like you and your idea, or they don't. It's like dating because your goal in dating is not to convince someone who is a bad match for you that somehow you are really a good match. That's a recipe for divorce," says May. "It's really about finding the person that is naturally a good match. Same way with investors." One thing that May did much differently than other entrepreneurs seeking funding is that he approached investors without a business plan. While he doesn't recommend this as a solution for every startup, he does find that in his case, not having a business plan did not really hinder his efforts. "I sat in front of VCs who thought I was crazy for not having a business plan. I was asked 'how can you run your business if you don't have a written plan?'," says May. "I also sat in front of VCs who said 'glad you didn't waste time writing a plan, because we wouldn't read it anyway.' It's really more of an art, not a science." Another less standard practice May chose to include in his presentation at the Open Angel Forum was not a special slide on his pitch deck or a certain phrase; May drank a beer while presenting. Again, he doesn't suggest this is a solution for everyone, but he uses it as an example of how to relax and "be yourself" when pitching to VCs. They are very experienced at talking to startups and any good VC knows how to spot when you are full of hot air, and they will call you on it. "It's never easy, not even when you have a good idea. That's the point. That's why so few people ever do it," says May. "If you want to learn to raise money, the best thing to do is go try to raise money." Photo by Flickr user apol3 . Discuss
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Backupify's CEO On Wooing Investors: "It's Like Dating"
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Every entrepreneur will tell you that recruiting the right candidate is important. While startups are constantly trying to find programmers that mesh well with their culture, team and work-style, one article suggests that companies still struggle finding candidates that know how to program at all. Jeff Atwood published a post this morning entitled, The Non-Programming Programmer with a stunning look at how many interviewees misrepresent their abilities. Sponsor Says Atwood, "I am stunned, but not entirely surprised, to hear that 'the vast majority' of so-called programmers who apply for a programming job interview are unable to write the smallest of programs... It's the equivalent of attempting to hire a truck driver and finding out that 90 percent of the job applicants can't find the gas pedal or the gear shift." Atwood suggests putting candidates through a quick programming test before screening for culture-fit and personality. In a past post he presented us with some phone screening questions and something he calls the FizzBuzz test. Today he points to Mike Lin's See[Mike]Code as an excellent screening resource. Lin's site allows you to watch candidates program in real-time. Those that complete the 10 line programming test are then considered for an in-person interview. These tests can potentially save a company alot of money as many in-person meetings require springing for airfare and a hotel room. Other good screening resources might be found in a candidate's GitHub profile or in links to their contributions to open source projects. Photo Credit: turtlemom4bacon under the CC Attribution-Share Alike 2.0 Generic License Discuss
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Hiring Programmers: Screening Out Liars and Duds
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One of the best ways to become an industry influencer is to get involved in industry events. They're a great way to surround yourself with respected colleagues and they offer your the opportunity to network with others who share your interests. If you've got the guts to go toe-to-toe with some of the industry's top pundits, get yourself on stage and show the world what you're made of. When you apply for speaking opportunities, here are some of the points to consider.
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Reach and Engagement: One of the most important things to remember is that event planners want to fill audience seats. If you can prove that you're going to contribute to that, you're more likely to be invited onto a panel. Event companies often use platforms like Strutta and Vator TV to encourage voting and early audience participation. The voting indicates whether or not you have a following. Meanwhile, competitions like the Enterprise 2.0 Launch Pad event gauge the interest on Twitter as startup fans retweet pitches to the first round of TechWeb judges.
Relevancy and Expertise: In some cases expertise is pre-determined by the events you've already spoken at. If you're trying to get into a mobile event, it makes sense to explain that you've already spoken at another mobile conference. If this event is your first one, you may want to include links to white papers, blog posts and testimonial from notable industry celebrities. One way to ensure that you're pitching a timely idea is to poll your network via Google Moderator, Linkedin Question or Aardvark and find out what they want to hear from you. Sometimes it's easiest to see your most engaging material when an outsider offers you feedback.
Entertainment and Sound Bites:An event planner's biggest fear is that you're going to be forgettable. It's actually better to completely self-destruct than it is to be forgettable because at least self-destruction gets talked and tweeted about. In order to draw people in, many speakers pitch personal anecdotes and place them within the context of our shared history as startup entrepreneurs. Listeners generally find stories about themselves fascinating and if you focus on collective learning rather than your company pitch, you're more likely to produce an entertaining presentation. If you've got video of past speaking engagements or podcasts send those along with your application. Organizers are looking for panelists who are lively and sound bite-able so avoid using industry buzz words like "ramen profitable" or "minimum viable product". If an organizer wanted wisdom from Paul Graham or Eric Ries he or she would invite Paul Graham or Eric Ries. This panel application should be about you sharing the lessons you've learned.
Photo Credit: Tom Woodward under the CC Attribution-Share Alike 2.0 Generic license
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